The California Legislature is debating a measure that appears to give Californians more options when a dispute arises with their healthcare service plan. Unfortunately, this bill, AB 1751 (Kuehl), is not in the best interest of California’s consumers.
Currently, when a consumer signs up with a health plan, such as medical or dental, he or she signs a standard contract which mandates that disputes will be settled through “pre-dispute binding arbitration.” Health plans often require enrollees to use arbitration rather than a jury trial to resolve legal differences in order to save time and money for both the enrollee and the health plan.
AB 1751 seeks to eliminate mandatory arbitration, which will have a direct impact on consumers: It will drive up the costs of health insurance and create a disincentive for employers to offer healthcare benefits.
Arbitration and other forms of alternative dispute resolution have become effective methods to avoid drawn-out, expensive court cases. On average, a jury trial takes 2 1/2 years to resolve, while arbitration can usually resolve cases in less than nine months. The American Bar Association conducted a study which concluded that individuals who used arbitration were more satisfied with their results than those who chose to go to trial. Arbitration has become such an effective tool in solving problems that the Joint Commission on Health Care Dispute Resolution actually recommends the use of arbitration to consumers.
AB 1751 will dismantle a proven dispute resolution process, only to line the pockets of trial lawyers. The California Medical Association, the California Association of Dental Plans and other organizations are working together to point out the deficiencies of AB 1751.
A better alternative can be found in SB 1934 (Polanco). This measure will maintain a proven dispute resolution process while providing consumers with the right to receive uncapped damages.
HMO reforms approved last year were a step in the right direction. Gov. Gray Davis and the California Legislature should keep the momentum going by supporting SB 1934 rather than dismantling a proven dispute resolution process.
Troy Becker
President
California Association of Dental Plans
Ojai
